Top U.S. Treasury Official Named Lead On Detroit Bankruptcy

by
Reuters
Don Graves, a deputy assistant secretary and top economic development official at the U.S. Treasury, will spearhead the federal response to the city of Detroit's Chapter 9 bankruptcy filing.

Top U.S. Treasury Official Named Lead On Detroit Bankruptcy

Don Graves, a deputy assistant secretary and top economic development official at the U.S. Treasury, will spearhead the federal response to the city of Detroit's Chapter 9 bankruptcy filing.

Gene Sperling, director of the president's National Economic Council, announced the appointment on Friday during a press conference with Obama administration, state and city officials to detail a more than $300 million aid package for Detroit.

Graves will report directly to U.S. President Barack Obama, Sperling and Sylvia Mathews Burwell, the head of the Office of Management and Budget.

Detroit became the largest U.S. city ever to file bankruptcy a little more than two months ago. The city, led by Emergency Manager Kevyn Orr, has been unable to provide many basic services to residents bogged down by $18.5 billion in debt.

A large portion of the more than $300 million in aid, which comes from federal, state and private sources, was previously earmarked for Detroit, but delivery of the funds was slowed by red tape and other issues.

About half the funds will be used to tackle widespread blight in the city, one of Detroit's most urgent issues. Funds will also go toward hiring up to 150 firefighters for the city and improving the city's transportation system.

The aid package is a far cry from the $80 billion in financing extended to the U.S. auto industry during the 2008-2009 financial crisis that saved General Motors Co and Chrysler Group LLC from collapse. But the White House has already ruled out a similar bailout for Detroit.